MPs warn there could be significant drop in nursery places in deprived areas
MPs and peers are calling on the Government to address a £662 million funding gap in early years education.
A formal inquiry by the All-Party Parliamentary Group for Childcare and Early Education suggests recent policy decisions have put severe strain on non-maintained childcare and early education settings.
In its report, Steps to Sustainability, the APPG claims the Government’s 30-hours’ funded childcare provision for three- and four-year-olds has “exacerbated” financial challenges across the sector.
The group also states that providers are struggling with a rise in business rates, with some facing a doubling of their rates and one seeing a rise from £13,000 to £30,500 following a revaluation in 2017.
The report calls for business rates to be scrapped for private, voluntary and independent providers in England, as has already happened in Scotland and Wales.
According to the APPG, if the current funding gap is not addressed, it may lead to a significant drop in nursery places in deprived areas, compared to more affluent areas.
It suggests this means risking a situation “where only wealthy families are able to access childcare services, leading to a reduction in educational opportunities for children as well as more challenges to parents looking to go back into work”.
Independent research agency Ceeda said the early years sector faces an estimated funding deficit of £662 million in 2019/2020 in the wake of rising costs and frozen funding levels.
The group is calling on the Government to use the upcoming spending review to provide urgent financial support to address the funding gap.
Tulip Siddiq MP (pictured), chairwoman of the APPG, said: “We know that the early years are hugely important to a child’s physical and mental development and future life chances.
“However, there is a significant body of evidence to demonstrate that childcare providers are battling to achieve and maintain financial sustainability, and that Government policies are a major cause of this challenge.
With the spending review just around the corner, and a new prime minister soon to enter Downing Street, this report is being published at a critical time.
“We urge the Government to take on board our recommendations and provide the urgent funding and support needed to successfully, and sustainably, deliver its childcare policies”.
The report has been welcomed by prominent members of the early years sector.
Neil Leitch, chief executive of the Early Years Alliance, said: “This report and its recommendations are the result of a year of hard and serious work by the APPG to understand the early years funding crisis.
“It deserves a considered response. It simply will not be good enough for ministers to respond by trotting out lines about record spending, happy parents, or a lack of will from providers to make things work.
“It’s time for them to accept that under-funding is causing a crisis of sustainability in the sector that’s putting downward pressure on quality and forcing up parent fees.”
Children and families minister Nadhim Zahawi said: “We are focused on raising the quality of the early years so that every child gets the best start – that’s why we are investing more than any previous government in childcare and early education, including £3.5 billion on our offers this year alone.
“We have seen a huge increase in the number of children benefiting from 30 hours of free childcare and there is near universal take-up of the 15-hour offer for three- and four-year-olds, meaning parents are spending less on childcare and can work more flexibly.
“Across Government, we are providing significant childcare support for families on low incomes, including our 15 hours’ offer which has benefited more than 850,000 of the country’s most disadvantaged two-year-olds.”
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